Covidien net income flat in 2Q despite Confluent sale

Global biotech firm Covidien PLC reported Friday that its net income rose five-tenths of a percent in its fiscal second quarter, totaling $441 million, or 97 cents per diluted share, compared with $439 million, or 92 cents per diluted share, during the same period a year earlier. More

MANSFIELD – Global biotech firm Covidien PLC reported Friday that its net income rose five-tenths of a percent in its fiscal second quarter, totaling $441 million, or 97 cents per diluted share, compared with $439 million, or 92 cents per diluted share, during the same period a year earlier.

Net sales also improved during the three-month period ended March 28, climbing 2.7 percent to $2.6 billion from $2.5 billion in the second quarter of fiscal 2013.

The second quarter included the sale in January of Covidien’s Confluent biosurgery product line to Integra LifeSciences Corp., which resulted in a net gain of $111 million for Covidien. However, Covidien lost the income that previously had been generated by Confluent, which in the second quarter of fiscal 2013 totaled $59 million.

Discounting the Confluent income from the fiscal 2013 second quarter, Covidien improved its bottom line 16 percent, rather than the half a percent increase it did report under GAAP rules.

Covidien performed less well on a fiscal 2014 year-to-date basis. Although net sales increased 2.7 percent to $5.2 billion in the six months ended in March, net income dropped 10 percent to $839 million, or $1.84 per diluted share, compared with $932 million, or $1.96 per diluted share, for the same six-month period in fiscal 2013.

“As we continue to invest in and execute our global strategy, we are seeing results in line with our year-to-date expectations,” said José E. Almeida, chairman, president and CEO of Covidien. The medical device tax and unfavorable foreign currency exchange were among the factors impacting the year-to-date net income, he said.

By segment, Covidien’s medical device sales rose 2.6 percent in the fiscal second quarter to $2.2 billion, up from $2.1 billion in the second quarter of fiscal 2013. Medical supplies sales also increased slightly, from $387 million to $399 million, an increase of 3.1 percent.

Sales in the United States rose 1.6 percent during the quarter, totaling $1.28 billion compared with $1.26 billion the year prior. Sales in Western Europe, Japan, Canada, Australia and New Zealand climbed 1.8 percent to $938 million while emerging market sales rose 8.8 percent to $383 million.

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